Grocery shopping was once fairly simple: the customer just requested the necessary item (floor, sugar, eggs) from the shopkeeper who removed it from his supply. There were no multiple brand and size choices, or flavor varieties of the same item. In the 1940's metal grocery store shelving was introduced which dramatically changed the grocery business. Now the business became increasingly self-service, as the shopkeeper became a retailer, losing the personal relationship with the customer.
The retail grocer had to focus on knowing and ordering the products the customers preferred, in the size and configuration they wanted, monitoring the inventory movement to keep fresh inventory arriving and the shelves filled, managing the pricing to take advantage of buying opportunities and keep the customer buying from him rather than from a competitor. Product suppliers increased in numbers and products they offered, as well as developing sophisticated advertising programs to convince shoppers to buy their product at whatever store they shopped. As everything compounded—items inventoried, advertising and promotions, more competing stores, more and different people doing the shopping—management of grocery and consumer product sales has become very challenging. Research has found that store inventory records are generally no better than 65% accurate, out-of-stock items are more than 8 percent, and cost retailer 4 percent of sales. (See Gain inventory visibility and increase sales, http://www.checkpointsystems.com/en/products-services/Merchandise-Visibility.aspx, the disclosure of which is incorporated by reference in its entirety).
A large expense for the retailer (in materials, time/labor, waste generation) is shelf labels. A typical chain retailer makes 10,000 to 12,000 price changes each week, and creating shelf labels to reflect those many changes requires printing paper labels and using staff labor to attach them to the shelves. Mistakes often result during that process, and the number of price changes and shelf-labeling errors are both on the rise. (See, Two Food Chains Trial RFID-based Electronic Shelf Labels, Claire Swedberg, Mar. 30, 2009, http://www.rfidjournal_Altierre.pdf the disclosure of which is incorporated by reference in its entirety).
It is common for the shelf label to be different from the cashier's register price, leading to irritated customers and lost time for price checks. Correct item pricing is critical to the success of the business, both in covering costs and keeping customers.
Consumer product manufacturers and retailers alike depend on advertising to attract customers to their location and to inspire them to purchase their product. Advertising is a huge expense, and as technology develops, more venues open for reaching potential customers. While newspapers, magazines and network TV commercials were once the major advertising media, those venues are being reduced in favor of social media available to customers 24/7. Despite the enormous cost of advertising it is often difficult to measure its effectiveness: how many people actually bought a product because they saw it on a Super Bowl commercial or a high definition video billboard? One caveat seems to be unchallenged: point-of-purchase advertising is the most effective means to generate a customer purchase. “POP is based on shopper behavior. . . . While in a store, a consumer becomes a declared shopper. Relevant buying messages in a store become relevant to a shopper. . . . 70% of purchase decisions are made in-store. . . . 68% of shoppers said in-store messages would sway their product purchasing decisions.” (See http://www.slideshare.net/slickchickit/finaldeck, the disclosure of which is incorporated by reference in its entirety).
The problem then is multiple: products must be available and displayed, the inventory must be managed accurately, shelves must have correct item and price labels, and advertising must be appropriately managed to accomplish its purpose. If only there was a way to address each of these issues at once!
Both inventory control and shelf labeling have been addressed for over a decade. Walmart, in 2003 issued an ultimatum that all vendors would provide RFID labeling to individual items, recognizing the high cost of performing manual inventories and the equally high cost of the errors associated with this form of inventory management. Yet, that effort was largely abandoned because of item tagging costs, RFID reading problems associated with metal cans and liquids, particularly when metal cans and water container s(bottles) are stacked together tightly as on a pallet, and the issue of who would bear the cost of providing RFID tags.
While the grocery RFID effort is largely dormant, others have attempted to improve shelf labeling with plastic rewritable tags, ESL's (electronic shelf labels), and other mechanisms attached to existing metal shelves. These have proved cumbersome to the shelving of merchandise, labor and time intensive to monitor and maintain, limited in effectiveness and efficiency to modify shelf item information. To date no real breakthrough in shelf label effectiveness has surfaced; meanwhile mandatory shelf labeling consumes considerable labor and material dollars.
Why has RFID labeling not been welcomed by retail grocers? The first reason is generally, “the tags are too expensive”. However, the single largest obstacle to RFID in the grocery environment, the metal shelving on which all inventory is displayed, has been unaddressed. Traditional metal grocery shelving is not compatible with the integration of modern communications technology; the transfer of RFID information has been ineffective in spite of attempts to place strategically located antennas and readers on shelf backs, or aisle ends. These were also inefficient to install and limited the flexibility of shelf relocation.
In regard to the issue of shelf labels, there have been numerous attempts to improve on the constantly replaced paper labels (and their associated waste generation), with longer lasting (sometimes rewritable) plastic labels or with pricing strips to cover an entire shelf front. A shelf labeling system with electronic control, as yet is limited to ESLs, individual battery powered shelf attachments, which have the drawbacks of being cumbersome in the product display area, are easily dislocated from the shelf, require monitoring and battery maintenance by store staff, and are not very eye-catching. As cited by Bonner (US 2013/0176398 A1), “. . . such displays are expensive and susceptible to damage leading to failure of the display. Moreover, such displays may require independent power supplies which make readjusting the spacing between vertically and horizontally adjacent shelves a difficult task as the power supplies have to be independently rerouted. Accordingly a need exists for alternative display shelf modules for displaying product information and modular shelving systems incorporating the same.”
Finally, both suppliers and retailers constantly attempt to perfect point-of-purchase advertising. An overview of any grocery may reveal floor decals in front of a manufacturer's products, hanging signs and banners, automatic coupon dispensers, battery powered talking videos, temporary focused product displays (with seasonal or item specific focus), signs on shopping carts, store fronts and parking lot cart carrels. The impact is generally confusing, messy, and overwhelming to the customer and he responds by attempting to block it all out. Retailers complain about their stores being taken over by the clutter of manufacturers' advertising. Manufacturers complain that retailers often place the advertising provided in a location remote from the inventory items being promoted—reducing the sales effectiveness of the investment.
Similar to ESLs are units that attach to existing metal shelves used to provide POP advertising. Currently these are videos played on a DVD player which cycles the message on a set play schedule. This limits the manufacturer's and/or retailer's ability to modify or start a unique point in time advertisement to take advantage of unscheduled or unforeseen events. To date there is nothing which allows network provided advertising via broadband or alternative means directly to the shelf where purchase decisions are being made.